Several global investors, including Dutch pension fund APG Asset Management, International Finance Corporation (IFC) and Asian Infrastructure Investment Bank (AIIB), are in competition against each other to invest up to USD 250 million (Rs. 2,080 crore) in Mahindra Susten’s Renewable Infrastructure trust (InvIT), according to a report.
Sources told that Mahindra Group's renewable energy-focused Engineering, Procurement and Construction (EPC) unit and an Independent Power Production (IPP) unit are part of Mahindra Susten's businesses, which has a value worth about USD 1 billion.
A person familiar with the matter said the deal is likely to close in two to three months. The three global investors are currently conducting due diligence on the assets which are part of Mahindra InvIT.
For the 35% stake in Mahindra InvIT, the deal will include primary and secondary share sales, the person told the news publication.
Later, Mahindra Sustin will bring in some domestic investors such as mutual funds or family officials to meet minimum shareholder requirements.
Currently, the Canadian Fund Ontario Teachers' Pension Plan (OTPP) owns approximately 30% of the stakes of renewable energy company Mahindra Susten Pvt. Ltd for an equity value of Rs 2,371 crore (USD 300 million).
The agreement envisages the setting up of an Infrastructure Investment Fund (InvIT) in compliance with the regulations of the Securities and Exchange Board of India.
Avendus Capital acted as the financial advisor to the Mahindra Group on the transaction, and Ambit was the financial advisor to Ontario Teachers.
The Mahindra Group and Ontario Teachers have jointly explored the sale of an additional 9.99% stake in Mahindra Susten in May 2023. The group has also deployed these funds, plus an incremental amount of up to Rs. 1,750 crores, in the business and InvIT over the next seven years.
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